CANADA STOCKS-Earnings misses, gold-miner selloff drag TSX lower

Reuters Staff

4 Min Read

* TSX down 73.08 points, or 0.57 percent, at 12,672.30
* Six of the 10 main index sectors advance
* Gold-mining shares fall with bullion price
* Cenovus, Canadian Pacific drop after results
* Loblaw, Rogers gain after quarterly reports
By John Tilak
TORONTO, July 24 (Reuters) - Canada's main stock index fell
on Wednesday, hit by disappointing results from Cenovus Energy
Inc and Canadian Pacific Railway Ltd as
investors processed a flood of earnings reports from the
country's top corporations.
The TSX index was also yanked lower by a 4.6 percent drop in
gold-mining shares, which fell with the price of bullion,
as the market meanwhile digested more evidence of economic
recovery in Europe, a manufacturing rebound in the United
States, and growing signs of a slowdown in China.
Strong results from Loblaw Cos Ltd, Canada's biggest
grocer, and Rogers Communications, the country's
biggest wireless company, helped drive up shares of those
companies but failed to push the index into positive ground.
Wednesday's fall was the second straight for the TSX after a
four-day rally. It has trailed the S&P 500 badly this
year.
"The TSX is struggling to catch up with the S&P 500," said
Elvis Picardo, strategist and vice president of research at
Global Securities in Vancouver. "The core thesis is that risk
appetite needs to make a comeback."
Negative sentiment on the index, he said, "is partly
earnings driven and partly driven by a tendency to take profits
after a fairly decent run."
The Toronto Stock Exchange's S&P/TSX composite index
, which briefly touched a seven-week high on Tuesday,
closed down 73.08 points, or 0.57 percent, at 12,672.30.
"It's hard to get too excited about the Canadian market as
you have the drag from the golds and the materials side," said
Gavin Graham, chief strategy officer at Integris Pension
Management Corp.
"But companies like Rogers and Loblaw are showing that the
nonresource side of things is actually doing quite well," he
added.
Shares of Loblaw rose 3.2 percent to C$49.46 after it
reported a higher quarterly profit as food and clothing sales
both rose, prompting the company to raise its forecast for
full-year operating income.
Rogers reported a steep rise in wireless data revenue for
the second quarter. The stock climbed 1.8 percent to C$41.95.
But CP Rail reported a slightly lower-than-expected
quarterly profit, hurt by floods and a number of high-profile
derailments. The stock stumbled 2.1 percent to C$127.44.
The materials sector, which includes mining stocks, lost 3
percent due to the weakness in gold producers. Goldcorp Inc
lost 4.7 percent to C$29.24, and Barrick Gold Corp
fell 5.4 percent to C$17.67.
Shares of energy companies gave back more than 1.6 percent,
with lower oil prices hitting sentiment.
Cenovus Energy Inc's second-quarter operating
profit missed analysts' expectations by a wide margin as higher
crude costs hurt refining operations. The oil producer dropped
5.5 percent to C$30.49 and played the biggest role of any single
stock in pushing the index lower.
Encana fell 1.9 percent to C$17.78 despite a 25 percent
increase in second-quarter operating profit at Canada's largest
gas producer as its move to spend the bulk of its budget on
developing more lucrative oil- and liquids-rich natural gas
plays paid off.
Six of the index's 10 main sectors, including the weighty
financials group, were higher.